Updated: Mar 28
Industry 4.0 initiatives have reached a plateau; despite the substantial advancements it's yielded, the drive toward automation and system efficiency has created fractional structures that, at times, completely disempower and disengage project stakeholders. This was no more evident than during COVID-19 when entire supply chains came to a standstill due to system disruptions. In any model where automation, machines, and mass-production are the core operators, and humans aren't central to operational success, there is inherent risk and limitations to improvement and growth. Engineering offices and construction sites are not assembly lines; a shift is needed from the drive to mass-automate toward project delivery models with human creativity, not automation systems, at the core of operational excellence. Simply put, successful projects cannot be achieved by procuring ever-more technology. Success requires human creativity.
Industry 5.0 paves the way for a new industrial project operating paradigm. It merges technology with human ingenuity and sustainability initiatives in a model intended to improve performance potential while also creating community, ecological, and stakeholder value. Industry 5.0 moves us toward a more robust project delivery model that harnesses the power of people augmented by flexible and adaptive technology. This operating model shift will create vast new opportunities for project teams that make the transition early in the adoption cycle.
The First 4 Industrial Revolutions
As prevalent as technology is today, we've come a long way in the last 250 years. In the late 18th century the first industrial revolution began with the introduction of the steam engine, resulting in a transition from manual production methods to mechanized processes. Beginning in Great Britain, the use of mechanized equipment quickly expanded across the United States, and Europe. The use of technology spawned new opportunities in production and commerce, increased GDPs, and improved the standard of living for many.
The second industrial revolution was precipitated by substantial technological advancements including the internal combustion engine, as well as the invention of the telegraph and telephone. Beginning in the late 19th century, these inventions paved the way to the production and use of new energy sources, including gas, oil, and electricity. Mass production became possible, and manufacturing opportunities burgeoned. Telecommunication capabilities advanced and the steam turbine was invented. The second industrial revolution improved business capabilities, enhanced communication potential, yielded production lines, and increased throughput and commerce opportunities globally.
The third industrial revolution was spawned from the invention and use of computers and electronics in the second half of the 20th century, as well as the discovery of nuclear energy. There are a multitude of books and movies that document and theatricize the inventions and innovations brought about by the third industrial revolution; for brevity, innovations included computers, industrial technology, space exploration technology, biotechnology, and robotics. The third industrial revolution is often referred to as the digital revolution.
Industry 4.0 is a term coined in reference to the fourth industrial revolution; this revolution is underway now, albeit further advanced in some industries than others. It is demarcated by the use of personal computing devices, IoT devices, artificial intelligence, and industrial automation. Industry 4.0 presents a shift to cloud computing and automation in a way that often separates people from machines, and replaces manual work and computation with automated processes. Digitalization instead of digitization is of focus as organizations race to transform into digital entities.
Each industrial revolution, the first through the fourth, has been precipitated by technological advancement. Whether a steam engine or a jet engine, new technology propels industry forward, generating new opportunities and driving new value streams. But, sometimes that propulsion drives us off course; the rapid pace of change can cause us to steer slightly away from an ideal path, and yields outcomes that were unexpected or unwanted. As organizations have replaced the human heart with a robotic one, they've realized that technology alone cannot keep blood pumping and the body moving. A shift is needed to re-connect humans and technology in meaningful ways that create continuous value streams.
Why Move Beyond 4.0?
Industry 5.0 is a step sideways from industry 4.0, and a step forward. Technology is not yet so advanced (in most instances) that it can improve, or learn to improve, performance, or the performance of the system within which it operates. Extrapolating, it may be determined that system improvement is stifled in environments where full-automation is the innovation end state. Improvements will be achieved up until such point as the system enters a steady and productive state. At this point, innovation, and improvement, flatline. How can project processes improve if there is a barrier to forward momentum? The answer is to navigate around it.
Industry 5.0 iterates on the technological advancement of Industry 4.0 by re-integrating humans in the paradigm. While rapid technology deployment and mass automation may drive increases in productivity and reduce cost and schedule durations, the outcome is self-limiting without the continuous intervention of human operators. Creativity and human ingenuity are the 'secret sauce' of improvement beyond mass-automation. These elements are missing in many industry 4.0 programs, which results in improvement and innovation limitations; The human element is foundational in Industry 5.0.
What is Industry 5.0?
Industry 5.0 merges human ingenuity, collaboration, and a sustainability focus with the use of technology, including automation processes, to yield a more holistic production model. This 4-point framework (People, Collaboration, Sustainability, and Technology) yields a harmonized operating paradigm which is capable of driving long-term project performance gains across industries; these gains are achieved through the effective deployment of human ingenuity, while balancing the importance of social collaboration and sustainable development. Industry 5.0 is the future of industrial project delivery.
Industry 5.0 is an industrial revolution. At a basic level, it's just beginning. Some teams are embracing it wholeheartedly, while others are still grappling with the advancements brought about in Industry 3.0 (many construction sites are still heavily reliant on pen and paper). The utility in shifting from an Industry 4.0 to 5.0 paradigm cannot be overstated in the industrial projects space. When positioned, it seems only logical that a model which impedes human creativity isn't likely to propagate far or for long. For this reason, it's time for project teams to begin exploring industry 5.0 operating models.
For clarity, Industry 5.0 is only just beginning, and only in some industries. Some industries are only now experiencing the first waves of industry 4.0; Industry 5.0 is more advanced. Those who haven't progressed far in their industry 4.0 journey may leapfrog it entirely in pursuit of this more seamless and robust paradigm.
Industry 5.0 in Engineering and Construction
The question that most industry professionals ask when presented with the Industry 5.0 framework is 'how does this apply to an industrial project.' Industry 5.0 will transform the way that some projects are executed altogether, while posing incremental change for others. How Industry 5.0 will impact a project team is highly dependent upon how far down the 4.0 journey the team is. However, there are a number of 5.0 absolutes which are directly applicable to the industry project space, and which any team may consider, adopt, and iterate upon.
Human-Centric Project Execution
Industrial projects are highly complex. In a mass-automation paradigm, human ingenuity can be stifled at the point that automation systems have been fully deployed. Once the system reaches steady-state, incremental improvements often aren't feasible. Shifting an operating system often requires substantial design, new equipment or software, and capital investment. Therefore, innovation can be unwelcome or outright prohibited for a period of time (until capital expenditures can be recovered).
Conversely, human intervention in automated processes can be discouraged, mainly due to capital outlays in expensive software. Consider, for example, the deployment of an automated pipe drafting solution that selects the most optimal piping routing for a designer. If the designer is prompted to accept the routing due to overreliance on technology, even if the designer doesn't believe the routing is optimal, we can see the disconnect between person and technology quite easily.
Industry 5.0 empowers people. It combines their creative potential with advanced technology to drive innovation and industrial advancement. And, in the capital project space, this innovation is more necessary than ever before due to the continued increase in project size and complexity.
As human capital is more highly valued in Industry 5.0, digital literacy is paramount. Project teams will invest more in digital literacy programs, as well as in technology skill development programs. Many teams are currently opting to cut training budgets to reduce technology deployment costs and reduce deployment timelines. In Industry 5.0, where human ingenuity is integral to success, this will no longer be a viable budgeting option.
Industry 5.0 will yield greater creativity in early project planning activities. Ingenuous ideas will be sought after and cultivated to improve overall project delivery models and construction execution strategies. Engineering design programs will integrate sustainability and constructability strategic planning and tactical planning sessions to ensure that key project goals are established and achieved. Material procurement and manufacturing processes will become more transparent, fabrication status will be visible in near real-time, and shipping and logistics data will bring material tracking protocol more in line with what we currently expect from on-line shopping (continuous alerts and real-time delivery tracking).
Construction efficiency will greatly improve through engagement and empowerment leveraging advanced technology, instead of a relentless focus on highly-automated processes. Construction sites are not manufacturing facilities; construction success is as much dependent on quality design and manufacturing as it is on field execution creativity and dynamic planning protocol. As an aside, if the success of any new initiative is measured solely by improvement in time spent working on the tools (a flawed efficiency model), your operating model will soon be swept over by the 5.0 revolution. Construction creativity and ingenuity will become a key driver of Industry 5.0 models; not a continued race to automate. Productive time measurement in a 5.0 model is outcome-based; not calculated by the amount of time a craft professional spends with a wrench in their hand.
Collaborative by Nature
While industry 4.0 propagated the move to semi-connected virtual project delivery models, Industry 5.0 moves teams back into co-located or immersive virtual environments and away from siloed structures. Collaboration is key; teams must be able to hyper-communicate through seamless channels, whether in-person or virtually. Virtual Co-Labs which combine stakeholders from engineering, procurement, construction, commissioning, and project management teams are critical to facilitating stakeholder engagement in this new paradigm, even between contractors that may normally be considered competitors. Augmented by advanced use of data and technology, Co-Labs move quickly, work together, make holistic decisions, and positively impact project trajectories.
Collaborative contracting models are integral to achieving success in an Industry 5.0 environment. Integrated Project Delivery (IPD) and shared risk-reward contract models will become more prevalent. Project stakeholders will be expected to act and contract in ways that positively impact the project outcome. Gone will be lopsided risk weighting and ill-incentivized standard contract structures as project teams shift their focus towards contract models that yield greater net gains for all parties, including the communities that the project directly impacts.
Technology that Empowers
In Industry 5.0, system resilience, not stability, is the desired state. Technology systems and solutions that prioritize stability over resilience will be deprecated as more black swan events unfold (climate, health, and political) which disrupt normal project operations. Technology that facilitates system resilience in this scenario will become more prevalent and mass-automation solutions (automated and highly scripted workflow enablers) will lessen in importance within project teams. In the industrial project space, this means that rapidly deployable software with flexible workflow options will be preferred over highly rigid, process-driven tools.
Digital twins are integral to 5.0 projects. As an information hub, they connect people and technology in ways that empower ingenuity, which is the core tenet of Industry 5.0. Project teams, including engineers, project managers, construction team members, and operations personnel will work seamlessly within digital twins supported by the democratization of data.
Edge computing will be more prevalent in Industry 5.0 to handle the mass data generation and processing needs of project teams. AI and machine learning will increase in use, and teams will be managing not just big data, but bigger data. Systems thinking will be paramount in designing and operationalizing systems and solutions, as well as in the design and deployment of cyber-physical systems.
Cobots will also increase in prevalence. Where robots are physically separated from their human counterparts, cobots work and interface directly with humans to increase work efficiency while enabling both mass-production and mass-customization of work products. Cobots will be prevalent in fabrication facilities, in on-site laydowns, and in support areas such as tool cribs and field offices.
Industry 5.0 projects have a strong environmental focus. Sustainability is not just a priority; it's integral to project success. Industry 5.0 teams evaluate environmental impacts of their actions and work collectively to mitigate environmental risks; they focus on resource efficiency and design; they craft project plans that minimize drastic fluctuations in resource draws; they integrate sustainable production methods and calculate embodied carbon in design parameters. Industry 5.0 project teams embrace sustainability as an obligation; they legitimately care about achieving outcomes that positively impact the built and social environments.
Core Benefits of Industry 5.0
Industry 5.0 empowers people and creates more substantial value with available resources. A marked improvement on Industry 4.0, Industry 5.0 provides a holistic project delivery paradigm that embodies core topics of importance to today's, and future, project leaders. The shift to industry 5.0 is inevitable; but, there are also key benefits which executives may consider when evaluating the need to precipitate the shift within their organizations and project teams:
Empowering teams - Industry 5.0 makes greater use of human knowledge and ingenuity
More selective use of technology - Teams move away from mass-automation in favor of flexible solutions that can mass-automate or mass-customize, thereby enabling performance at scale under a multitude of conditions
Improved collaboration - Teams work smarter, together leveraging seamless communication channels and virtual co-location technology
More sustainable building methods - Project teams focus more on sustainable development, integrating environmental and social impact in planning and decision-making processes
The Path Forward
The 5th industrial revolution has already begun. Because of the overlap with the 4th revolution, the shift will take time and will take more conscious effort to embrace than the transitions faced by organizations through industrial revolutions of the past. Historically, the total duration between industrial revolutions has shortened due to the exponential evolution of technological capability; however, this is the first overlap of industrial revolutions that has been observed in history. Setting out on this 5.0 journey, for many, means iterating on the current 4.0 journey, or expanding upon it. For some, it will yield a complete reframe of operational strategies.
Making the shift from 4.0 to 5.0 isn't simple. But, for engineering and construction teams that embrace the potential for positive change, this shift is just another step along the journey. For a revolution that's inevitable, forward-looking teams are well positioned to begin taking their first 5.0 steps now.